America's Largest Health Insurer Is Feeling The Pinch Of Health Care Reform

A man looks over the Affordable Care Act signup page on the HealthCare.gov website in New York in this photo illustration Thomson Reuters (Reuters) - UnitedHealth Group Inc , the largest U.S. health insurer, said on Thursday that first-quarter profit fell on costs and taxes related to the national healthcare reform law as well as government cuts to private Medicare funding.

The company said the Affordable Care Act related-costs and the effects of budget sequestration last year on payments from the government negatively affected earnings by about 35 cents per share. Its Optum technology-related division, which has had a role in building the exchanges created by that reform law, continued to grow.

The company's quarterly results slightly beat analyst expectations. UnitedHealth said net profit was $1.1 billion, or about $1.10 per share, compared with $1.2 billion, or $1.16 per share a year earlier. Analysts had expected first quarter profit of $1.09 per share, according to Thomson Reuters I/B/E/S.

UnitedHealth stuck by its previous forecast for 2014 earnings of $5.40 to $5.60 per share and said it sees revenue growth of about 5 percent to $128 billion to $129 billion.

The company, which provides commercial healthcare plans, private Medicare for older people and the disabled, Medicaid, and military health plans, had 44.67 million medical members at the end of the quarter, down from 45.45 million at the end of 2013.